13 Finance

13.2. Finance of the established ABC

The finances of the established ABC must ensure its operations, as well as the construction of the audit system.

Please remember that the operations items listed in the previous section may vary in the given market conditions.

There are some decisions to make, nonetheless, before building the membership fee system, including answers to these questions:

• Will members pay the same amount or not?
• Will the audited publishers pay more or less membership fees (the audit fees are separate from the membership fee)?
• Will advertisers and/or media agencies pay amounts different from publishers?

I strongly suggest establishing the same membership fee for all members, regardeless of their size, number of publications issued, or segment of industry they operate in (advertisers or media agencies). This standardized fee structure ensures the equal right to vote in the general assembly, as well as an equal voice in decision making for the ABC.

The size and position of the individual members will be taken in consideration later on, when establishing audit fees is discussed.

For the period immediately following establishment of the ABC (no audit system, therefore no audit fees in place), the calculation of the membership fee should be very simple: total operational budget divided by the number of members.

This stage should be reached after a long series of meetings where audit system issues are discussed and a large volume of paperwork – agendas, handouts, reports – is completed. I remember some of the audit system meetings where I was involved lasting more than 24 hours! When planning for the first budget of the ABC, one should plan for this amount of time and matching resources.

Another budget item that comes at this time is marketing and communications. Once an ABC is established, it should provide the market and members with timely, thorough communications that continuously update members on proceedings and progress. Such communications require funding too. Remember to add a cushion that provides for reaching the highest number of projected members.

It is necessary to find funding for the ABC operations, but it is equally important to know – and prepare for an ABC organization that must be sustainable over the long run. One way to ensure funding for the long term is to finance the ABC from membership fees alone.

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